Making sense of market moves
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New Jersey, famous for emphasizing a GTL lifestyle and forcing a local congressman to pretend to listen to Springsteen on repeat, now has one more claim to fame: mysterious drones.
Sightings of unidentified aircraft over the Garden State have increased dramatically in recent weeks, prompting many to speculate that aliens might be visiting, before speculating further about why anyone from outer space would visit New Jersey of all places.
But drones aren’t just making waves on niche extraterrestrial internet forums—they’re also one of the hottest new investments on the market.
Drones stocks keep flying higher
Shares of Red Cat Holdings skyrocketed 26.97% today on the news that the drone manufacturer has partnered with Wall Street cybersecurity darling Palantir to equip its drones with Palantir software. The little-known drone company has become big news on Reddit's infamous r/WallStreetBets board, where it’s quickly caught the attention of retail traders, who have helped push shares up over 1,129% in 2024.
But Red Cat isn’t the only hot drone stock on the market. Unusual Machines popped nearly 250% in just two days back in late November on the news that Donald Trump Jr. was joining the drone company’s advisory board. Shares of Unusual Machines are up 332% in 2024.
The sky’s the limit
Drone stocks are capitalizing on several market trends at the moment. Geopolitical tensions have made defense stocks a hot commodity these days, and some analysts believe that the second Trump administration will mean increased spending on US-made drones. Elon Musk has made his position on military spending clear via posts on X, and the incoming administration’s potential focus on drones will only benefit drone makers.
Drone companies are also usually young, and therefore haven’t had enough time on public markets for share prices to rise too far. That makes them prime targets for retail traders looking to get more bang for their buck than by buying shares of more established defense contractors.
And, of course, let’s not forget all the recent drone sightings. Any publicity is good publicity, and with drones solidly stuck in the public imagination, it’s no wonder that the companies building them are having a moment.—MR